I don't have my CAOD disk at hand right now, but I can remember that I had the same issues. I assume it's something of a Windows / window issue. There is no genuine fullscreen mode for the game, i.e. the window frame is always visible with the CAOD version. Try using the 'drag' tool (or whatever it's called in the English Windows) and drag your game window to maximum width and height. That way, the artifacts should disappear.
By the way, this is why I prefer the DOS version of the game. Though the resolution is lower, I think that the overall graphics have a more polished look, in some sense (the 3d engine even supports something like primitive anti-aliasing effect when rendering ship and plane models)
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